There May Be Reason For Hope In Knowles' (NYSE:KN) Disappointing Earnings
The market was pleased with the recent earnings report from Knowles Corporation (NYSE:KN), despite the profit numbers being soft. However, we think the company is showing some signs that things are more promising than they seem.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
NYSE:KN Earnings and Revenue History May 6th 2025
How Do Unusual Items Influence Profit?
Importantly, our data indicates that Knowles' profit was reduced by US$8.4m, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If Knowles doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
Our Take On Knowles' Profit Performance
Unusual items (expenses) detracted from Knowles' earnings over the last year, but we might see an improvement next year. Because of this, we think Knowles' earnings potential is at least as good as it seems, and maybe even better! On the other hand, its EPS actually shrunk in the last twelve months. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Every company has risks, and we've spotted 1 warning sign for Knowles you should know about.
Today we've zoomed in on a single data point to better understand the nature of Knowles' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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